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Encouraging anonymous political donations

In our effort to reduce the corruption in politics, one of the main thrusts in campaign finance regulation has been for transparency. Donations to candidates must be declared publicly. We want to see who is funding a candidate. This applies even to $100 donations.

While the value of such transparency seems clear -- though how effective it's been remains less clear -- there are some things that have bothered me about it.

It's quite a violation of privacy. We demand secret ballot, but supporting a candidate gets us in a database and a lot of spam.

Some people are so bothered by this invasion of privacy that they actually refrain from making donations, even small ones, to avoid it.

What if we reversed that thinking. What if we demanded that donations to candidates be anonymous?

A special agency would be created. All donations would flow into that agency, along with which candidate they are meant for.

Only the agency would know who the money went to. After auditing was done to assure the agency was distributing the money correctly, the info would be destroyed. Before that it would be kept securely.

Money would be given to candidates in a smoothed process with a randomized formula every few weeks, to avoid linking donations with dates. This might mean delays in getting some money to candidates.

While anybody could say that they donated, to offer, solicit, show or receive proof of donation would be a crime. An official method of hiding donations in corporate P&Ls would need to be established.

In general, all donations in any given period (a month or quarter?) must be given as a lump sum, with a list of how much to give each candidate. So even if you're sure a donor would never give anything but party X, you don't know which candidates in party X.

Now it would not be impossible to hide things entirely. If the Koch brothers say they gave a big donation, and you believe them, it's fairly safe to say it wasn't to Obama. At least for now, this will buy them more access to candidates on their side. But this gets harder over time. And the common corporate strategy of donating to both sides of a race to assure access no matter who wins becomes vastly less valuable. While you might convince somebody you are a regular donor and will pull your donation if you don't get what you want, it becomes very hard for you to prove.
An extreme method of trying to hide the donations would be to require all donations be done as a cheque to "United States Treasury" and require that amounts larger than some threshold must be given only in the month prior to quarterly payment or other tax deadlines. Of course, somebody could demonstrate donation by showing two cancelled cheques to the US treasury, though sometimes people write those for taxes. People will find ways to try and demonstrate their love, but the fact that it's illegal should keep the quantity of that fairly low.

As long as the system is a success and donations are anonymous, there's far less need to limit the donations. A billionaire might well give millions but if they can't prove it, all they buy is what they are supposed to be able to buy -- a better chance of election for a candidate whose views they support.

Now you main point out that since Citizens United, wealthy people and corporations can make their unlimited donations to superpacs, and can prove it, and expect favours in return. It's possible that the court would be willing to accept a requirement for anonymity here as well, though it's not possible to offer anonymity for those who actually organize and run the superpacs -- they will still be owed favours. If donation limits on direct gifts to candidates are reduced, the demand for superpacs we see today might reduce.

It's not impossible to allow both kinds of donations of course -- public, reported donations side-by-side with anonymous ones. People could require public reporting of donations over a certain size. But that defeats the purpose, which is that if even the candidate can't be sure who is backing her, we have less need as a public to know ourselves.

There are other pitfalls. A brand-new, unknown candidate could be approached by a rich funder who says, "You run, and I will give you tons of money." If the candidate is a nobody it will be obvious that their first money could only have come from one place. (This is called "traffic analysis" in the computer security world.) This works best when every donation is lost in the noise. There will always be some traffic analysis but certainty will be gone for any real candidate.

And there is the wonderful ability to lie, part of what makes secret ballot great. A donor can appear to support a candidate in public and private as fully as possible, but they are free to name any other candidate or candidates when filling out the donation form. It's a good plan -- make the likely winner believe he is probably indebted to you, while helping some others who you also like. But after a while, it makes selling influence less enticing. You might give out favours and access to people who never really gave you a dime.

Update: Turns out I had misread some of Larry Lessig's proposals, and he actually likes the idea of anonymous contributions. Here's a proposal with similar goals devised by professors Ackerman and Ayers.

A few more notes: You can make donations super-obscure if you limit them. Then you can even let people prove that they donated. For example, if there's a $100K limit for President and a $10K limit for house, or a $150K total for all races, it doesn't really matter that you can show you donated $100K this month -- that's a blip in the presidential race coffers. In this case you can publish everybody who donated and how much -- just not to who. A little privacy invading but not nearly as much as the current system. This does do away with the classic $40,000 a plate fundraising dinner, though.

Transparency vs. Uncertainty

Neither of the two approaches is perfect. Today we favour transparency, and there is much that makes sense about it. But is it working? Even though great organizations like the Sunlight Foundation -- whom I solidly support for their work documenting donations and helping identify quid pro quo -- are doing what is supposed to happen in a transparent world, I am regularly bothered how the corruption is documented and nothing seems to happen about it. Yes, we see that senators write bills that favour their sponsors, but what actually gets done to stop that?

In the anonymous donation world, politicians would still have a sense of where their bread was buttered, I don't think I can stop that. But if enough uncertainty is added, maybe it would actually make a difference. Would politicians go to the mat for donors who may not have donated at all?

Comments

Doing things through government always gets corrupted - look at financial regulation. The lawyers would find ways to circumvent this.

I think a better strategy is to have a free for all.Anyone can donate to anyone as much as they like. In the past the masses got downtrodden in this because they couldn't speak as one voice. Now, with crowdfunding sites it becomes possible for the average person to express their voice. Politicians, mostly the democrats, would put up proposals on a site, actual proposals (not dinner seats), such as I will do this thing if you this pledge threshold is reached. It would be a detailed proposal, so citizen lawyers can analyze it properly.

That way, the corporates would buy their side, the citizens would buy their side.

In Singapore, politicians are paid a high salary, so that the best are attracted. In the crowdfunding system, "entrepreneurial" politicians could enter the race, making money providing the average citizen what they want.

Individual candidates could get this started virally. One candidate can require all donations to go through an anonymization service. It would be a great way for him to prove that he's not being influenced by large donors. It might put pressure on other candidates to do the same thing. We'd just need to add a legal exception to transparency for doubly-anonymous donations.

A much better solution would be to outlaw campaign contributions entirely. Costs for the campaign would be paid for out of tax money. This works in several countries. Of course, this would upset the principle that the rich determine what happens in politics and will change only if a majority in the US wants that change and if they can get it implemented under the current system.

Even if the anonymity is forced, behind the scenes it will be clear to those involved---but not the public---who donates how much to whom.

Of course many people are interested in this for the USA and it has been tried in a few states. However, it's much harder for the USA to force it, and there is more money in the USA looking to buy power, and more power in the USA up for sale.

In the USA you can't forbid people from buying ads with their political message, so the usual approach has been to offer a deal, "If you will forgo private money, we will give you public money, up to a limit." But the limit was too low, and so in the last election it was blown through with private money.

The protections on free speech, especially political speech, are far, far too strong to ban the advertising and donating. But I do believe you can do things about the method of donation (ie. the anonymous donation system described.)